A Needed Addition to Campaign Finance Reform

Campaign finance reform has been needed in Nevada for a long time. Instead of waiting to see if legislators would kill reform measures again this session, voters mandated, for the second time, that current campaign finance laws be changed by passing ballot question Number 10. This amends the Nevada Constitution and requires legislators to change current statutes. The reporting threshold will be lowered. (How low remains to be seen). Party caucuses and political action committees (PACs) will be limited in the amounts they can contribute and also will have to disclose who donated money and how much. Reporting dates will be moved closer to election day and contributions made in the name of another person will be made illegal. Various bills have been introduced, named and renamed, in hopes of putting an end to this longstanding debate. The proposed reform is fairly comprehensive, covering the areas where abuses run rampant. However, some loopholes will still exist, especially in labor union political activity. Some unions spend over 90 percent of total dues on political activities and union members should have the right to know which candidates they are supporting.

What Nevada’s Right to Work Status Really Means

Because Nevada is a Right to Work state, workers cannot be forced to join or pay dues to any labor union. Only 21 states have adopted Right to Work statutes. According to the Bureau of Labor Statistics, the 21 Right to Work states increased their manufacturing payrolls by 2.68 million between 1960 and 1993. On the other hand, those states subject to federally-imposed unionism lost 1.36 million manufacturing jobs. Although Nevada workers voluntarily join unions and pay union dues, they often have no idea how much of their money is used for political activity or if they agree with the political activity their dues are financing. Last election, Rutgers University economist and union specialist Leo Troy estimated that organized labor’s unreported expenditures totaled between $300 million and $500 million, which includes "volunteer" time, mailings, phone banks and get-out-the-vote drives.

The following are two examples of the biggest labor organizations in the nation and where their money goes.

AFL-CIO President John Sweeney publicly announced "the newly militant labor movement will pour $35 million into political campaigning this year [1996]. We’re going to mount a political action effort of unprecedented scale with every union doing its share by contributing ideas, money, staff, media and materials." To finance this effort, the union bosses decided to raise union dues 36 percent. This unusual move required a special convention to pass the assessment. It is no secret that the majority of the political action taken was to endorse Democratic candidates and Clinton’s last campaign, even though 40 percent of union members voted Republican in the last election.

The National Education Association (NEA) political action committee reported spending about $2.25 million in 1994. Of that, $2.23 million went to Democrats. According to its 1996-97 operating budget, the NEA earmarked $20.7 million to "build a broad-based support for a quality public education system," specifically to "build bipartisan constituencies among those running for and elected to public office to support education." The NEA’s supposed bipartisan support is non-existent when it comes to money and volunteer hours. One in 10 delegates to the 1996 National Democratic Convention were members of the NEA. In Nevada, over 80 percent of the state NEA reported PAC money went to Democrats, according to NPRI research.

Making Unions Accountable

Under current campaign finance laws, PACs do not have to report how much money is used for campaigning and given to candidates. If the proposed reform package passes, PACs will have to disclose to the Secretary of State how much was spent each election. With this law in place Nevadans will finally know how much money unions are funneling into politics. But union members still will not know how much they are paying out of each paycheck. Four states, including Utah, have closed this loophole. These states have passed laws requiring labor organizations to establish separate funds for political purposes.

Under this law, referred to as the Labor Organizations Deductions Act, unions may only expend money for lobbying, electoral, and political activities not bearing upon the ratification of a collective bargaining agreement if the organization establishes a separate political fund. Contributions to the fund must be solicited independently from any other solicitations by the organization. Membership dues may not be used or intermingled with this separate fund. And the cost of administering the fund is paid from fund contributions and not from membership dues. The PAC fund must be registered with the Secretary of State.

Conclusion

The intent of the Labor Organizations Deductions Act is to prevent unions from collecting funds for political purposes unless members expressly give their employers permission to deduct such fees from their wages. Such an act is necessary because most union members have no idea a large percentage of their union dues are used for political activity. According to a 1996 Luntz Research Survey, 58 percent of AFL-CIO members did not know of the organization’s political involvement in the last election. Further, 62 percent of the members surveyed opposed the use of their dues for this campaign. As one member, who wished to remain anonymous, bluntly said, "I want to know where the money goes and I want to know where my money is spent." This piece of legislation does not prohibit labor organization activity; it simply requires the organizations to be more accountable to their members – an understandable request.

Erica Olsen is a research analyst. She will be examining important legislative issues this session in an attempt to offer a new perspective on public policy decisions.